Locomotive engineers and conductors at Canadian Pacific Railway Ltd. went on strike early on Wednesday after failing to reach a contract agreement, shutting down freight operations on Canada's second-biggest railroad.
The Canadian government indicated that it might step in to end the work stoppage, which it said could damage the country's still-fragile economic recovery.
"The government is concerned about the national economic significance this will have, and we are prepared to act in the interest of the national economy," Labor Minister Lisa Raitt said in a statement.
The Conservative federal government has stepped in on more than one occasion to block work stoppages at Air Canada, the country's largest airline. At the time it said the intervention was necessary because the airline provides a service that is essential to the Canadian economy.
At CP Rail, about 4,800 engineers, conductors and traffic controllers — or nearly a third of its workforce — walked off the job after last-ditch talks on Tuesday failed to produce a new labor contract.
The company and the Teamsters Canada Rail Conference, which represents the engineers and conductors, said talks would resume Wednesday morning.
"We will not walk away from the negotiation table," said Doug Finnson, a union vice-president.
The stoppage means shippers in Canada, including farmers, miners and retailers, will have to find other means to move their goods or will find their wares stranded.
"In addition to customer and supply chain impacts, the suspension of CP's freight service will also impact many of the connecting railways with whom we do business," a CP spokesman said in a statement.
A CP Rail spokesman said commuter rail services in Vancouver, Toronto and Montreal, which operate along the company's tracks, would continue without disruption.
Raitt said officers from the Federal Mediation and Conciliation Service were available to assist C P and its union in their negotiations.
The Mining Association of Canada said it was concerned about the potential economic impact the strike could have on mining communities. It urged the government to take immediate action to resolve the dispute.
"The CP rail strike will cause a shortfall of essential fuel and supply shipments to mines across Canada," the association said in a statement. "It will also prevent mines from delivering their products to their end-point destinations."
Employees have been without a contract since the end of last year and have been in talks with CP since October 2011.
The strike comes at a difficult time for CP. Its chief executive quit on Thursday in the face of a boardroom coup led by CP's biggest shareholder, who is demanding that the railway improve its operating performance, currently the worst in the industry.
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